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2018 | Year-End Houston Healthcare Market Report

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Houston healthcare real estate market continues to expand 

Healthcare Trends

Commentary by Beth H. Young, CCIM, LEED AP


In the business world, interest in healthcare is at an all-time high. The medical office sector is the fastest-growing sector in the U.S. commercial real estate.

Although major REIT’s recently seemed to apply the brakes on acquiring more of the sector, primarily due to concerns about interest rates, the pool of private buyers continues to grow for one of the nation’s most stable asset classes, quality medical office buildings. Many buyers have observed the economy’s expansion since 2009 and are looking for safe investments in case things change. Few sectors compare to healthcare’s record when the economy takes a downturn. Records show medical office properties kept an average occupancy level of 90 percent or better, even in the worst years.

We have plenty of reasons to expect buyer’s interest in healthcare to continue. Although the industry is under constant pressure to control costs, improve care and provide more convenience for patients, the local industry benefits from 100,000 births and 30,000 adults turning 65 each year. In addition, the region adds population the size of some mid-size towns every year through net migration. Those events start a chain reaction of medical care needs. Houston’s impressive health systems continue to push the boundaries of the greater metro area by expanding in submarkets that service not only Houston suburbs, but nearby rural counties that have little to no medical providers. In Texas, 27 counties have no primary care physicians, and only 16 have one. Routine medical care in those areas is often more than 60 miles away, and specialty care is typically 200 miles away. The ongoing expansion and development in Houston suburbs by systems including UTMB Health, HCA, MD Anderson, Houston Methodist, Memorial Hermann, Texas Children’s, CHI St. Luke’s and others will provide needed medical support for not-too-distant neighbors. The Houston Partnership is forecasting an additional 9,000 jobs will be added in the Houston healthcare sector in 2019. 

Hospital Expansions

Some of the notable hospital expansions in the second half of 2018 include the following:
»» Houston Methodist expanded their presence in the Texas Medical Center by opening a 22-story, 954,000 square foot, $700 million Paula and Joseph C. “Rusty” Walter III Tower. It features 366 patient beds, 19 OR’s plus four hybrid OR’s.
»» Memorial Hermann topped out its new tower in the Texas Medical Center that will have 160 patient beds, 24 OR’s, 16 additional emergency center bays, more than 600 new parking spaces and a 335-seat café. It will be completed in 2020.
»» Memorial Hermann Northeast in Humble opened a $70 million, 123,000 square-foot, five-story patient tower and a new fourstory, 100,000 square-foot professional office building.
»» The second phase of Legacy Tower at Texas Children’s Hospital opened and houses Texas Children’s Heart Center®, ranked #1 in the nation by U.S. News & World Report for cardiology and heart surgery.
»» The University of Texas MD Anderson Cancer Center opened a 200,000 square foot, four-story facility in League City (south of Clear Lake City) that houses new and expanded cancer care services and a first-of-its-kind clinical collaboration with The University of Texas Medical Branch (UTMB Health).
»» Baylor College of Medicine’s Joseph Barnhart Department of Orthopedic Surgery has opened a new clinic at 6363 San Felipe near Winrock Road.
»» HCA Houston Healthcare Southeast opened its new center for neurosciences and orthopedics at 4000 Spencer Highway, in Pasadena. A 20-bed, 15,800-square-foot center is a new build-out on the hospital’s fifth floor and designed to meet the needs of neuroscience and orthopedic postoperative patients.




TMC is home to the World’s Largest Children’s Hospital, Texas Children’s Hospital & the World’s Largest Cancer Hospital, MD Anderson Cancer Center.


Houston Healthcare Industry In The News


According to the 2018-2019 report from the Center for World University Rankings, six Houston-area universities and medical schools ranked in the top 500 universities in the world.

For details, visit CWUR


Year-End 2018 Houston Medical Office Highlights



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2018 | Year-End Houston Healthcare Market Report

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